Sen. John Sununu announced on Friday long-awaited Internet phone legislation that would effectively eliminate state and local authorities’ ability to tax and regulate broadband phone calls.

The bill, which is expected to draw fire from state governments, says all authority over regulating VoIP (voice over Internet Protocol) services is “reserved solely to the federal government.”

The measure, VoIP Regulatory Freedom Act, also imposes some curbs on the Federal Communications Commission’s ability to extend to VoIP much of the thick quilt of rules and requirements that govern the traditional phone network. For instance, it bans imposing certain “access charge” taxes, but does require the FCC to levy VoIP universal service fees that will be redirected to provided discounted analog phone service to low-income and rural Americans.

This from a New Hampshire "live free or die" senator! A fight with the states is expected.